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Author Topic: The problem with the new wave of cryptocurrencies  (Read 2145 times)
PeanutCoins
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April 22, 2014, 11:47:21 AM
 #1

I've been looking lately into NXT, eMunie and Ethereum; I still have to wrap my head around the details, but from what I can gather so far all of these seem rather solid propositions in paper.

In practice though... I couldn't help but notice that they all share the following:

    Premine: a small stake of the total economy is distributed among founders and friends or otherwise distributed arbitrarily to other people

    Funding & IPO: a portion of the premine is sold for funding purposes on release; prices are fixed and set by the devs on said IPOs.

    Operating like a company: It's seems pretty glaring that the focus is not so much on creating a currency but on creating a sustainable business for the founders, developers and early-early adopters.

By contrast, successful cryptocurrencies like Bitcoin and later Litecoin had no premine and no IPO or funding; they were just open-for-all experiments that grew, not cryptocurrency-businesses. Granted times have changed, and IPOs might make sense now since we know cryptos can work and everyone wants to be aboard the next Bitcoin, but still. This all sounds too much like Ripple, which as far as I'm concerned was a flop.

Am I too conservative in thinking that all of these new cryptocurrencies are doomed to fail despite their technical merits?

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HCLivess
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April 22, 2014, 12:09:11 PM
 #2

The first wave was about technology
The second wave must add marketing in order to be successful
For me, Ethereum cuts it so far

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April 22, 2014, 12:33:56 PM
 #3

The first wave was about technology
The second wave must add marketing in order to be successful
For me, Ethereum cuts it so far
They will never gain adoption/popularity as Bitcoin will. No matter what they do.

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whtchocla7e
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April 22, 2014, 01:16:30 PM
 #4

The first wave was about technology
The second wave must add marketing in order to be successful
For me, Ethereum cuts it so far
They will never gain adoption/popularity as Bitcoin will. No matter what they do.

Yes and Google will never beat Yahoo and AOL...

Yeah, right... Keep on dreaming!!!
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April 22, 2014, 01:20:02 PM
 #5

Yes and Google will never beat Yahoo and AOL...

Yeah, right... Keep on dreaming!!!
Actually Google is the leader, so is Bitcoin; that won't change anytime soon, if ever.
You are posting random nonsense.

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gagalady
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April 22, 2014, 01:22:49 PM
 #6

Well, technology keeps moving forward, what if we'll have Quantum computers in near future? Do you imagine how fast we could mine bitcoins then? 21 million wouldn't be a problem..
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April 22, 2014, 01:24:53 PM
 #7

Well, technology keeps moving forward, what if we'll have Quantum computers in near future? Do you imagine how fast we could mine bitcoins then? 21 million wouldn't be a problem..
Do not worry about that. It isn't going to happen that soon , also there is a chance that they won't be able to work with Bitcoin.

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benjyz
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April 22, 2014, 01:26:29 PM
Last edit: April 22, 2014, 01:37:06 PM by benjyz
 #8

Am I too conservative in thinking that all of these new cryptocurrencies are doomed to fail despite their technical merits?

As of today the status is:

Bitcoin has a marketcap of 6000M$ and perhaps 3-5 million users
Nxt has a marketcap of 26M$ and perhaps 1000-10000 users(?)
eMunie has a marketcap of 0M$ and 0 users(?)
ethereum has a marketcap of 0M$ and 0 users

Whether that will change is hard to predict, and anyone guessing it right will stand to make a fortune. With regards to premine/IPO I think you're right. Why would a superior concept need millions of investment when Bitcoin itself was boostrapped from 0$? It's actually a good contra-indicator. I don't mind risk-capital pushing things forward. there is a lot of handwaving/marketing going on. again, Bitcoin didn't require that at all, and nowadays it would be very easy for a new protocol to emerge. I'm confident that appropriate meta-protocols and markets will evolve overt time. Exchanges will ban clones / pump&dumps as demand for those coins will fade.

Having said that I don't find that the concepts of the alternatives are "solid", quite the opposite. There are some interesting ideas, but very far from proven. And you can't really reset the bootstrap process/money supply function. A system with a dynamic money supply could be an interesting experiment, though.
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April 22, 2014, 01:36:56 PM
 #9

Premine: a small stake of the total economy is distributed among founders and friends or otherwise distributed arbitrarily to other people

Bitcoin was instamined (cousin of the premine) by SN. Personally, I have no problem with a premine as long as the founders are upfront about it and are transparent as to its use. For example, using it to fund activities which bolster adoption of the currency.

Am I too conservative in thinking that all of these new cryptocurrencies are doomed to fail despite their technical merits?

I think that the alts are a good thing, regardless of whether they succeed or fail. I'm thinking specifically of the ones which add something to the knowledge space, like the PoS coins, like Ethereum, like NXT. Even if they fail, they are taking risks that the Bitcoin team cannot take and they are breaking new ground, and kudos to them for doing it.

NXT in particular has potential for much wider adoption.

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April 22, 2014, 01:44:52 PM
Last edit: April 22, 2014, 02:17:54 PM by benjyz
 #10

Bitcoin was instamined (cousin of the premine) by SN.

No, that's wrong. bitcoin 0.1 was released on Fri, 09 Jan 2009 17:05:49 -0800 (md5sum dca1095f053a0c2dc90b19c92bd1ec00 ). The timestamp of the gensis block was 2009-01-09 02:54:25 [1]. The famous quote from the genesis block is proof that the launch was after 2009-01-03: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.

That he owns 10% of the money supply is due to the fact that interest in the beginning was very low, and everything was mined after launch. And he has spend only 50 BTC of it (at least as far as I know). He might as well could have destroyed the coins, but that might have lead to some confusion.

[1] http://blockexplorer.com/block/00000000839a8e6886ab5951d76f411475428afc90947ee320161bbf18eb6048
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April 22, 2014, 02:22:55 PM
 #11

I have developed an idea for a new type of crypto-currency which will be all community driven. No IPO's, No Pre-Mine and the community will control everything involved with it.

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April 22, 2014, 03:40:27 PM
 #12

The problem however is that they are not rewarding people in a meaningful way to secure the block chain and in nxt's case of rewarding stake holders increasing rewards based on increasing stake seems fool hardy as all you would need to break the system would be a larger stake than everyone else and to not spend until the remaining coins shoot up in value to some ungodly level ..

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April 22, 2014, 03:40:51 PM
 #13

I've developed an idea for a new type of crypto-currency which will be all community driven. No IPO's, No Pre-Mine and the community will control everything involved with it.

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April 22, 2014, 03:56:32 PM
 #14

Hi, there are already community driven coins out ...

check http://crypto-coins-table.com/

Stellar Lumens an easy introduction - https://stellarkitty.com
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April 22, 2014, 03:59:40 PM
 #15

In practice these are young projects that require a lot of dev work/maintenance, and the original devs know better what they are doing. Plus I'm not sure if the community would be okay with a copycat for the sake of avoiding premining. But I guess it's worth a try if someone is up to the task.

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April 22, 2014, 04:05:13 PM
 #16

Well, technology keeps moving forward, what if we'll have Quantum computers in near future? Do you imagine how fast we could mine bitcoins then? 21 million wouldn't be a problem..
This post demonstrates that you haven't even read about the fundamentals of Bitcoin yet.
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April 23, 2014, 02:11:55 AM
 #17

I've developed an idea for a new type of crypto-currency which will be all community driven. No IPO's, No Pre-Mine and the community will control everything involved with it.

It sounds great in theory... but in practice it will be horrible.

When the community drives a coin fully, it has no direction.  There has to be a leader.

Building consensus is one thing, but letting a community lead without having a direction is another. 

For my money... we have all the technology we need now.  The coin that wins the race will be about planning and marketing.  Like BTC, you should be able to any of the "crap" coins out there and make them a winner simply by doing the work required to make them appeal to the masses.

BTC has a lot going for it, and a lot of drawbacks as well.  That is also true of any of the alt-coins present or in the near future.
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April 23, 2014, 05:52:59 PM
 #18

I think cryptos could change the world - https://www.youtube.com/watch?v=H4HW-TP9RD4 - the problem with Bitcoin is - it is too slow and too robusts - it suffers from the mtgox paradox - it was big first, but still has many issues. Especially slow development


Nxt introduction: http://justpaste.it/nxt-introduction-4-journalists

What can bring Nxt? http://justpaste.it/nxt-decentralized-internet


Nxt tips: NXT-R67P-6BZ2-XWAK-8RHZR | Nxt forum | Nxt Academy | Donate for Nxt at the Universities // BTCD: RVMLrnxYYy7uy8YZo9FcGfXbk1ZMnNifdg
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April 23, 2014, 06:12:59 PM
 #19

I think cryptos could change the world - https://www.youtube.com/watch?v=H4HW-TP9RD4 - the problem with Bitcoin is - it is too slow and too robusts - it suffers from the mtgox paradox - it was big first, but still has many issues. Especially slow development


Nxt introduction: http://justpaste.it/nxt-introduction-4-journalists

What can bring Nxt? http://justpaste.it/nxt-decentralized-internet


No, Bitcoin isn't slow. Stop promoting Nxt, nobody really likes it.

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April 23, 2014, 08:06:06 PM
Last edit: April 23, 2014, 08:36:27 PM by EvilDave
 #20

I've been looking lately into NXT, eMunie and Ethereum; I still have to wrap my head around the details, but from what I can gather so far all of these seem rather solid propositions in paper.

In practice though... I couldn't help but notice that they all share the following:

    Premine: a small stake of the total economy is distributed among founders and friends or otherwise distributed arbitrarily to other people

    Funding & IPO: a portion of the premine is sold for funding purposes on release; prices are fixed and set by the devs on said IPOs.

    Operating like a company: It's seems pretty glaring that the focus is not so much on creating a currency but on creating a sustainable business for the founders, developers and early-early adopters.

By contrast, successful cryptocurrencies like Bitcoin and later Litecoin had no premine and no IPO or funding; they were just open-for-all experiments that grew, not cryptocurrency-businesses. Granted times have changed, and IPOs might make sense now since we know cryptos can work and everyone wants to be aboard the next Bitcoin, but still. This all sounds too much like Ripple, which as far as I'm concerned was a flop.

Am I too conservative in thinking that all of these new cryptocurrencies are doomed to fail despite their technical merits?


Couple of points :

Premine isn't applicable to pure poS currencies...no mining, no premine. All coins are created at genesis.
As with NXT: 1 billion coins in a few seconds, and no more will ever be made.

IPO's are tricky. NXT was probably the very first use of an IPO-like structure to distribute a coin (correct me if wrong, pls) but since NXT's launch the use of an IPO has become insanely popular, especially with the more scammy members of our community.

Most of the 2nd gen cryptos have much more in-built functionality than the old-school first gen cryptos. In order to utilise and exploit this functionality, businesses are being set up by the users of 2nd gen currencies such as NXT.

I think you are being too conservative. The possiblities that some 2nd gen systems offer are absolutely amazing....I think that in a few years to a decade (barring a zombie apocalypse) almost all of a persons financial life will run on a blockchain somewhere.

This means not just using the simple money payment/storage/transfer that first gen systems offer, but asset exchanges, blockchain storage, distributed autonomous corporations, contract signing......everything: your mortgage,  your employers business, your investment portfolio, your favourite game, your NetFlix content, your customer loyalty card, will all be under your direct control, accessible via a 2nd/3rd generation blockchain based system.
(I hope this system will be NXT, obviously)


No, Bitcoin isn't slow. Stop promoting Nxt, nobody really likes it.
@Lauda: well, there are a few people who like NXT, but that isn't really the point.
You can't turn the clock back by five years, mate: first gen cryptos will become obsolete, 2nd and 3rd gen will take over that functionality and much more.
The only real question is who will be the ultimate leader of the 2nd gen pack : NXT, Ripple, eMunie, Ethereum, MasterCoin...?  

And Bitcoin is slow in comparison with NXT. I can shift NXT from account to account with almost no lag-time in between hitting send and seeing it (unconfirmed) on the recieving account. BTC takes minutes to achieve the same, and getting the required number of confirmations is again slower than with getting NXT transfers confirmed.
I've just spent much of last week trading NXT to BTC to fiat, and NXT is so much quicker to use.    

Nulli Dei, nulli Reges, solum NXT
Love your money: www.nxt.org  www.ardorplatform.org
www.nxter.org  www.nxtfoundation.org
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